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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: DavesM who wrote (359)	6/1/2001 12:30:52 AM
From: DavesM	Read Replies (2) \| Respond to of 1715

Good News: 1. The San Jose Mayor now backs the 600MW Power plant proposed for San Jose. 2. Calpine has lined up some more gas reserves to fire their power plants. (a sales agreement for gas from Pale Rider 3-26 well). Something about Power from Mexico: Someone please correct me if I'm wrong, but a very serious chokepoint is the ability to transport electricity from the South of the State to the North-A strong argument for the State taking over the Transmission grid?. Power from Mexico, might mean that the South will have lots of power, while the North of the State suffers from a disproportionate amount of blackouts (I wouldn't be surprised if it doesn't already).

To: DavesM who wrote (359)	6/1/2001 2:18:15 AM
From: Zeuspaul	Respond to of 1715

I believe that you are referring to what was going on before the State started taking responsibility for energy purchases. Trying to dissect this thing now is a bit of a futile task. The common thread I see is the market price of juice. Too low a price is damaging as well as too high a price. My point is the calls to just let the market work are a cop out..not a solution. The market can redistribute the same amount of juice..at higher or lower prices but it won't bring on more juice...at least not in the short run. And the short term is where a solution is needed. And the solution has to be a financial solution. The hardware is in place and new hardware is a long term issue. Financial incentives have to be implemented that reduce demand. The new rate structure is in place. The disfunctional wholesale market has to be tended to and that is an FERC responsibility. They are clearly negligent or over zealous idealogs IMO. The high market price has actually reduced supply. Many suppliers have not been paid due to the financial crisis and therefor are not producing juice. Wholesale prices for juice have been deregulated since 1996. Given all of the realities of the California market....the market simply did not create an adequate supply of juice. The market was and is the problem. Back last fall, the feeling of most politicians (and most Californians) probably was that: 1. The publicly owned utilities are lying and are over stating the difference between wholesale cost of energy and the cost to the consumer just to get a price increase. At the very least, the parent companies were making money hand over fist, and should easily offset what ever losses the local utility suffers. 2. The Utilities were in favour of deregulation in the first place, so if they really are losing lots of money, TS. I don't remember any talk about "pirates" from Texas, when SCE and PG&E were the ones losing money - only after the State took over. I don't think public opinion right or wrong has much to do with the problem. Certainly the utilities have a much better understanding of the electric market. One doesn't have to know why or how they screwed up. If anyone should have seen this coming it should have been them. Now that the State is running things, there is no transparency-everything a State Secret. The State releases whatever information they want, and keeps the rest secret. I thought, that the Governor said that now, 70% of the States electricity consumption is now covered by long term contracts, but does anyone really know? And if it is, what is the State really now paying to keep the State lit? The state is asking for help because the state can not solve the problem it got itself into. And it had plenty of help getting into the problem including a lot of help from the feds, utilities and business. The CA politicians are just pawns. The feds pushed for and continue to push for market juice. Market juice was not a California brain storm. It was the feds that backed the utilities when CA asked them to build more power plants. CA asked for more back in 1996+/- the utilities cried...said CA power predictions were to high...the feds backed the utilities. Why...because the market now does power planning. Well it doesn't. The market sees the end of its nose and that is about it. The market doesn't have to plan excess capacity for times of drought. All the market has to do is sell the same amount of juice but at a higher price. In fact, I've wondered about that $1900/MW that the State was charged a while back. I don't buy the conspiracy theories on either side. Davis is merely taking advantage of something that had already happened. The state is not a competent energy broker. It is in a game it shouldn't be in. Zeuspaul